In the filing BlackRock proposed In-kind redemptions could also offer tax efficiency, avoiding the need to sell securities for redemptions, which might trigger capital gains taxes.
Representatives from BlackRock and the Nasdaq engaged in discussions with the United States Securities and Exchange Commission (SEC) regarding the proposed rule permitting the listing of a spot Bitcoin (BTC) exchange-traded fund (ETF).
A November 20 SEC memo revealed that BlackRock presented a plan outlining the potential use of either an in-kind or in-cash redemption model for its iShares Bitcoin Trust. The SEC’s response to these models remains undisclosed, leaving uncertainty about the approval of a spot BTC ETF, which has faced numerous delays and rejections. Bloomberg Intelligence’s senior ETF strategist James Seyffart was the first to share the news.
Looks like @BlackRock also met with SEC! There’s a couple slides in relation to in-kind vs cash creation. Based on this it looks like BlackRock prefers in-kind for their #bitcoin ETF (makes sense as its probably cleanest structure for them & end investors)
h/t @btcNLNico https://t.co/AK0XspL4zJ pic.twitter.com/eeuUT9T5mn
— James Seyffart (@JSeyff) November 22, 2023
There are indications that the SEC might be nearing a decision, and if approved, it could mark a significant step toward mainstream crypto adoption. Additionally, SEC officials met with Grayscale representatives on Nov. 20 to discuss the company’s pursuit of listing a Bitcoin ETF.
BlackRock CLears Its Stand on Redemption Requirements
As per the filing, BlackRock Inc (NYSE: BLK) also cleared its stand on the redemption requirements, and how would they handle investors willing to exit and redeem their shares.